In a networking environment, such as a datacenter or cloud environment, application performance based wide area network (WAN) path optimization is employed to optimize communication, for example, from cloud-to-cloud or cloud-to-Internet environments. In such a deployment, a central policy server (PS) collects performance information regarding traffic flows and WAN exit link usage reported from each border router under its control. Based on this information, the policy server makes routing decisions for traffic flows and redirects traffic flows among border routers to improve performance, perform load sharing, and improve failure tolerance.